Sirius gets serious

Is tiny Sirius Exploration (market capitalisation £2.1 million) about to change its spots? I hear word that a deal is being lined up to transform the business from a wannabe gold and copper miner in the Balkans to a more significant player in Russia and central Asia. At just 3.5p (spread 3p – 4p), the shares have a lot of upside potential.

Sirius is currently focused on eastern Macedonia where it has a joint venture with large US copper miner Phelps Dodge and an agreement with Rio Tinto to explore its Macedonian database to pinpoint further drilling opportunities. To date, it has come up with two decent targets: a ‘good’ copper/silver prospect at Osogovo and a ‘small’ copper/gold prospect at Kadiica. Both cover quite large areas but are low-grade mineralisations.

To keep itself going, Sirius raised £263,000 in capital last year and has shareholders’ funds of £452,000. At the time of the last interim figures, in December, the company said its future strategy would be to continue its policy of putting together joint venture deals and other agreements with major mining companies and ‘use the board’s corporate finance skills to look for potential acquisitions’.

The rumour mill says the coming deal is likely to be a reverse takeover. With such a lowly market capitalisation, Sirius shares could be set for a strong run. They are not for the faint-hearted, but if you can accept some risk in your portfolio pick a few up.